Migrant worker remittances and micro-finance in Bangladesh
Assesses the scope and origin of migrant remittances in Bangladesh. It examines the current role of financial institutions in transferring remittance and macro-economic background against which such transfers takes place.
Over the past 25 years labour migration from Bangladesh has registered a steady increase. From 1990 onwards on an average 2,25,000 Bangladeshis are migrating on short-term employment, mostly to 13 countries. In the past the bulk of the migrants consisted of professional and skilled labour. However, the recent trend is more towards semi- and unskilled labour migration.
Major outflow of Bangladeshi labour generated significant financial flow to the country in the form of remittance. However, due to increase in the flow of unskilled and semi- skilled labour, remittance is increasing at a much lower rate than the labour flow. Remittance is crucial for Bangladesh’s economy. It constitutes almost one-third of the foreign exchange earning. In 1998-99, remittance contributed 22 percent in financing imports. Studies have shown it has strong positive impact on GDP, and also on consumption and investment.
Major outflow of Bangladeshi labour generated significant financial flow to the country in the form of remittance. However, due to increase in the flow of unskilled and semi- skilled labour, remittance is increasing at a much lower rate than the labour flow. Remittance is crucial for Bangladesh’s economy. It constitutes almost one-third of the foreign exchange earning. In 1998-99, remittance contributed 22 percent in financing imports. Studies have shown it has strong positive impact on GDP, and also on consumption and investment.